The Downside of Lower Unemployment

“Friday’s jobs report could very well show the U.S. unemployment rate fell again in January—this time perhaps in part because federal jobless benefits have ended,” the Wall Street Journal reports.

“A drop related to the expiration of the program would likely reflect two shifts.”

“Some number of jobless may have stopped looking for work and therefore aren’t counted as unemployed. Others may have taken jobs they would have turned down if benefits had continued. Several recent research papers suggest the first shift—people dropping out of the labor force—could be the more significant of the two. Both factors could provide fodder for policy makers debating whether to extend the program.”